Borrowers do the sums after rate hikes add hundreds to repayments

Natasha Luscri-Miller and her partner moved house multiple times in five years and at one point lived in a caravan.

Months ago they bought a unit with the government's 5 per cent deposit scheme.

"I think we cried for like a week. A huge relief to be able to have some stability and not be at the whim of a landlord," Ms Luscri-Miller said.

But that stability has come at an increasing cost.

The couple are facing higher mortgage repayments after the RBA raised interest rates to 4.6 per cent.

"I'm at that point where I'm like, 'How much more are you going to squeeze before you're satisfied?'" Ms Luscri-Miller said.

Australians with a $750,000 mortgage will be slugged an extra $114 a month, taking the total hit to $454 since the RBA began raising rates in February.

RBA governor Michele Bullock said at yesterday's press conference that the measure was tough but necessary.

"We know this is going to hit people pretty hard," she said.

"Hopefully, in a few years' time when inflation is back down, this will all have been worth it."

Highest rates in 15 years

The latest quarter of a percentage point hike takes the cash rate to 4.6 per cent, the highest level in almost 15 years.

Financial Counselling Australia said the Reserve Bank's decision to lift the cash rate would deepen financial stress for households that were already struggling.

Interim chief executive Jane Pires said it was urging banks to respond with genuine hardship support.

"Mortgage stress is already the number one concern for people reaching out to the National Debt Helpline," she said.

"Financial counsellors say their clients are very distressed, and for anyone already in financial difficulty with a mortgage to pay, a rate hike is always going to sting," Ms Pires said.

In the June quarter, mortgage stress returned to the top of the list of reasons people contact the hotline, ahead of ATO debt and other credit issues.

"The other distressing thing for those in hardship is many people are dealing with multiple, interconnected pressures at once, across housing, debt and everyday living costs," Ms Pires said.

Calls and chats to the hotline reached 187,905 in the 12 months to the end of August 2026, up 11.76 per cent from 168,133 over the same period the year before.

The Small Business Debt Helpline saw an even sharper rise, with contacts up 24.56 per cent from 9,586 to 11,941 over the same 12-month period.

Renters may also be hit when rates rise

Anglicare Sydney chief advocacy officer Rob Stokes said the rate rise would be felt hardest by people already living on the edge.

He claims rate rises can be passed onto renters, but economists disagree, suggesting it is low supply that pushes up rents.

"The banks pass on rate rises. Landlords pass on higher costs. Developers pass up new housing opportunities. But people on low incomes have nobody left to pass the burden onto," Dr Stokes said.

Anglicare Sydney research found that only one per cent of rentals across Greater Sydney were affordable for people on low incomes.

"The Reserve Bank has a job to do on inflation, but governments can make sure the people with the least are protected," Dr Stokes said.

Experian Australia and New Zealand data science head Barrett Hasseldine said the rate rise could add to financial pressure for households already finding it difficult to manage their repayments.

Its August Business Pulse Monthly shows personal loan hardship rose to 2.14 per cent in June, 14 basis points higher than a year earlier.

"Mortgage hardship eased to 0.92 per cent over the same period, 6 basis points below the same time last year. This could suggest repayment stress is building unevenly, with personal loan borrowers currently showing more signs of pressure," Mr Hasseldine said.

"We'll be watching how this rate rise affects repayments over the coming months and whether hardship spreads beyond personal loans."

Treasurer Jim Chalmers said he understood Australians were doing it tough.

"Australians are under pressure. We know that," he said.

"That's why we're providing cost-of-living help in the most responsible way that we can in the most responsible budget that we can at the same time as we address some of these longer-term challenges in our economy, like productivity."